Summary of Yuran Dairy's Conference Call Company Overview - **Company**: Yuran Dairy - **Period**: First half of 2025 - **Total Revenue**: 10.284 billion CNY, up 2.3% year-on-year [2][3][10] Key Financial Metrics - **Raw Milk Revenue**: 7.89 billion CNY, accounting for 76.8% of total revenue, up 7.9% [2][11] - **Raw Milk Sales Volume**: 2.04 million tons, up 15.8% [3][11] - **Gross Profit**: 3.09 billion CNY, up 8.3% [2][10] - **Gross Margin**: 30%, an increase of 1.7 percentage points [2][10] - **Net Loss**: 250 million CNY, a reduction of 47% from the previous year [3][10] - **Free Cash Flow**: 2.81 billion CNY, up 7% [3][10] Operational Highlights - **Annualized Milk Production per Cow**: 12.9 tons, up 2.4% [2][5] - **High-Quality Fresh Milk Production**: 13.1 tons per cow, a historical high [2][5] - **Cost Savings**: 0.26 CNY per kg of milk, a reduction of 12% [2][5] - **Feed Sales Volume**: Decreased by 9.7% to 430,000 tons [2][6] Strategic Initiatives - **Breeding Strategy**: Adjusted to improve cow productivity and genetic quality [5][9] - **Smart Operations**: Implemented technology for precise feeding and cow comfort [5][9] - **Green Development**: Initiatives include biogas purification projects and proprietary alfalfa cold-resistant gene technology [2][8] Market Challenges and Responses - **Industry Pressure**: Faced challenges from international trade tensions and weak domestic consumption [3][10] - **Sales Strategy Adjustments**: Introduced specialized feed brands and expanded into overseas markets [6][13] - **Cost Control**: Reduced sales, administrative, and financial expenses [14] Future Outlook - **Production Goals**: Expected average milk production to maintain around 13 tons, with total output exceeding 4 million tons [4][27] - **Market Demand**: Anticipated improvement in demand due to seasonal factors and macroeconomic policies [16][22] - **Long-term Strategy**: Focus on technological innovation, management upgrades, and green development [9][15] Industry Trends - **Raw Milk Pricing**: Expected to stabilize as supply-demand balance improves by year-end [16][22] - **Deep Processing of Dairy Products**: Considering expansion into cheese and whey production, despite current limitations in resources [19][20] Conclusion Yuran Dairy has demonstrated resilience in the face of industry challenges, achieving growth in revenue and production metrics while implementing strategic initiatives for cost control and operational efficiency. The company is well-positioned for future growth with a focus on innovation and sustainability.